Charles Schwab

Almost 50% of Gen Z and Millennials want crypto in retirement funds: Survey

Nearly half of Gen Z and Millennials are also already invested in digital assets outside of their retirement funds and cited “inflation” as the biggest obstacle to early retirement.

Nearly half of Gen Z and Millennials want to see crypto become a part of their 401(k) retirement plans, according to an October survey from United States asset manager Charles Schwab.

Asking participants what they would like to see added to their 401(k) retirement products, the firm found that 46% of Gen Z and 45% of Millennials said they “wish” they could invest in cryptocurrencies as part of their retirement planning.

It shouldn’t come as a surprise, as the survey also found that 43% of Gen Z and 47% of Millennials are investing in cryptocurrencies outside their 401(k) already, which could suggest the group’s affinity for the asset class.

The asset manager surveyed 1,100 401(k) retirement plan participants aged between 21 to 70 to complete the 10-minute survey conducted between April 4 and April 19, 2022.

Participants of the survey needed to have worked for a company with 25 or more employees and be current contributors to their company’s 401(k) plans.

Millennials generally refer to those born in the early 1980s to mid-1990s, with Gen Z generally born between the mid to late 1990s to the early 2010s.

The results are in stark contrast to the surveyed Gen X and Boomers — those born anywhere between the mid-1940s to late 1970s — with just 31% and 11% respectively wanting to invest in cryptocurrencies through their 401(k), and even less being current investors in the asset class.

Across the board, inflation was seen as the leading obstacle to retirement.

A similar study by Investopedia in April found only 28% of United States-based Millennials and 17% of Gen Z’s surveyed expected to use cryptocurrency to support themselves in retirement, however.

The asset manager currently does not offer any cryptocurrency investments as part of its 401(k) retirement plans, though crypto-based retirement funds have been in the works since Feb. 2019.

In April, Fidelity Investment reportedly put plans together to open up Bitcoin (BTC) investment for ts 401(k) retirement saving account holders, with savers allowed to allocate as much as 20% of Bitcoin to their savings portfolio.

In Australia, Rest Super became the first retirement fund to offer cryptocurrency allocation as part of a diversified portfolio to its 1.9 million members in Nov. 2021.

While most digital asset retirement funds are offered in the form of Bitcoin or Ether (ETH), a North Virginian county speculated putting a proportion of retirees’ pension funds into a decentralized finance (DeFi) yield farming account in May. 2022 — which was later approved in Aug. 2022.

But things can go wrong. A Quebec pension fund lost almost all of its $154.7 million, which was heavily invested into the now-bankrupt cryptocurrency lending platform Celsius.

Controversies like this have left U.S. Senators divided on the seriousness of the risks involved with crypto-exposed 401(k) retirement plans.

Among those are Senators Elizabeth Warren, Dick Durbin and Tina Smith, who’ve previously argued that it is a “bridge too far” to expose American’s “hard-earned” retirement funds to “cryptocurrency casinos.”

ETH products grow in August as BTC products dip: CryptoCompare report

The upcoming Merge has contributed to a rise in Ethereum investment products and trading volume, as crypto market AUM figures continue to drop amid the bear market

Ethereum investment products increased by 2.36% to $6.81 billion in assets under management (AUM) throughout August, outperforming Bitcoin products which saw a 7.16% drop off to $17.4 billion.

The figures were contained in a new report by CryptoCompare.

This was also reflected in the Bitcoin (BTC) and Ether (ETH) product trading volumes, with Grayscale’s most notable Bitcoin product, GBTC, experiencing a 24.4% drop in volume while its Ethereum product, GETH, actually increased by 23.2%. CryptoCompare’s report suggested that the highly anticipated Ethereum Merge was the cause behind the change in trading volumes:

“Indeed, even at a more granular level, no Bitcoin products covered in this report saw AUM or volume gains in the month of August. We could be seeing interest move away from Bitcoin in the short term, as Ethereum-based products hold the attention with the much-anticipated merge on the horizon.”

Monthly AUM figures for digital asset investment products fell 4% overall, which was largely attributed to a 6% fall from Grayscale’s GBTC product, as it accounts for $13.4 billion of the total $25.8 billion of digital assets under management at 53.4%.

The largest inflows came from products falling under the “Other” umbrella, representing non-Bitcoin and Ether products, which saw a 12.3% increase to $1.13 billion over the first three weeks, according to the report.

*Monthly AUM figures for digital asset investment products have steadily dropped throughout the bear market. Source: Crypto Compare.*

Despite the bear market, a number of highly-regarded financial institutions have launched crypto investment products throughout the month of August. These products have come in the form of exchange-traded funds (ETFs), exchange-traded certificates (ETC), exchange-traded notes (ETN) and trust products.

Among the most notable was BlackRock’s private spot Bitcoin Trust, a move that brought about a “here comes Wall Street” response from former Grayscale CEO Barry Silbert. The launch of the Bitcoin Trust from the world’s largest asset manager came following its partnership with Coinbase to provide its clients with institutional trading services.

Charles Schwab was another financial institution to make a play this month, having launched its own “Schwab Crypto Thematic ETF” tickered STCE on the New York Stock Exchange, which provides exposure to a mix of mining and staking companies, along with several blockchain-based applications.

BetaShares launched Australia’s first Metaverse-focused ETF on the Australian Stock Exchange (ASX), along with a new Metaverse- and nonfungible token (NFT)-focused ETF launched by finance firm SoFi.

Charles Schwab’s asset management arm launches crypto-linked ETF

Schwab said the investment vehicle will offer exposure to firms involved in mining and staking as well as those developing blockchain-based apps or distributed ledger technology.

Schwab Asset Management, the asset management arm of financial giant Charles Schwab, has launched an exchange-traded fund (ETF) with exposure to firms linked to cryptocurrencies.

In a Friday announcement, Schwab said its Crypto Thematic ETF was expected to be available for trading on the New York Stock Exchange’s Arca under the ticker STCE on Aug. 4. The fund tracks Schwab’s Crypto Thematic Index, providing an investment vehicle with exposure to companies “that may benefit from the development or utilization of cryptocurrencies and other digital assets.”

Likely because the United States Securities and Exchange Commission, or SEC, has not given the green light to ETFs providing direct exposure to Bitcoin (BTC), the Schwab fund will indirectly invest in crypto through companies. Schwab said the firms included those involved in mining and staking as well as those developing applications on the blockchain or distributed ledger technology.

“For investors who are interested in cryptocurrency exposures, there is a whole ecosystem to consider as more companies seek to derive revenue from crypto directly and indirectly,” said David Botset, Schwab Asset Management’s managing director and head of equity product management and innovation.

Schwab Launches Its First Crypto-related ETF—the Schwab Crypto Thematic ETF https://t.co/iVkCYdNUQw pic.twitter.com/18rJUZ3phy

— Charles Schwab Corp (@CharlesSchwab) July 29, 2022

The anticipated launch of the crypto-linked ETF followed the firm announcing a Crypto Economy ETF in March. According to Schwab, the exposure to companies dealing in cryptocurrencies between the two funds would be similar — while the former would track the firm’s Crypto Thematic Index, the latter would invest “at least 80% of its net assets” for companies listed on its Crypto Economy Index.

The SEC has not approved spot Bitcoin ETFs — those directly investing in the cryptocurrency — in the United States. However, some asset management firms in the U.S. have launched ETFs offering indirect exposure to crypto through futures contracts, and Canadian regulators first approved a Bitcoin spot ETF from Purpose Investments in February 2021.